Gujarat state government has given the approval to Tata Motors to acquire Ford India’s passenger vehicle manufacturing plant in Sanand near Ahmedabad. Gujarat government cleared a proposal submitted by the two companies for the deal. Earlier this week, the Gujarat cabinet gave no objection certificate for the deal to go ahead.

Tata Motors and Ford will sign a memorandum of understanding on Monday, according to report in Times of India. The Indian automaker will get the same incentives extended to Ford India when it launched the plant in the state. However, the two companies are still working out the details of the deal involving issues such as deal size, labour issues, financials, duties and benefits involved. A definitive agreement would be signed once the issues are agreed upon, the report added.

The American auto major announced its plans to exit India last year and its production plant in Gujarat stopped manufacturing vehicles in April this year.

Earlier this month, Ford shelved its plan to manufacture electric vehicles (EVs) in the country just months after its application for Production Linked Incentive (PLI) was approved by the Union government. The company had planned to manufacture EVs from one of its plants in Gujarat and Chennai but decided against it.

“After careful review, we have decided to no longer pursue EV manufacturing for exports from any of the Indian plants. We remain grateful to the government for approving our proposal under the Production-Linked Incentives and for being supportive while we continued our exploration,” the company said in a statement.

In February 2022, Ford India was amongst 20 different companies that were selected under the Centre’s PLI Scheme. Last year, Ford had decided to wind up its India operations, nearly 26 years after launching its operations in the country.